Correlation Between Cromwell Property and Prologis

Can any of the company-specific risk be diversified away by investing in both Cromwell Property and Prologis at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Cromwell Property and Prologis into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Cromwell Property Group and Prologis, you can compare the effects of market volatilities on Cromwell Property and Prologis and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Cromwell Property with a short position of Prologis. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cromwell Property and Prologis.

Diversification Opportunities for Cromwell Property and Prologis

-0.37

Correlation Coefficient

Cromwell Property  Prologis

Very good diversification

The 3 months correlation between Cromwell and Prologis is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Cromwell Property Group and Prologis in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Prologis and Cromwell Property is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Cromwell Property Group are associated (or correlated) with Prologis. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Prologis has no effect on the direction of Cromwell Property i.e., Cromwell Property and Prologis go up and down completely randomly.

Pair Corralation between Cromwell Property and Prologis

Assuming the 90 days horizon Cromwell Property Group is expected to generate 0.22 times more return on investment than Prologis. However, Cromwell Property Group is 4.46 times less risky than Prologis. It trades about 0.13 of its potential returns per unit of risk. Prologis is currently generating about -0.03 per unit of risk. If you would invest  27.00  in Cromwell Property Group on September 2, 2024 and sell it today you would earn a total of  1.00  from holding Cromwell Property Group or generate 3.7% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Cromwell Property Group  vs.  Prologis

Cromwell Property

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Cromwell Property Group are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable fundamental indicators, Cromwell Property is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Prologis

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Prologis has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable technical and fundamental indicators, Prologis is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Cromwell Property and Prologis

The main advantage of trading using opposite Cromwell Property and Prologis positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cromwell Property position performs unexpectedly, Prologis can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Prologis will offset losses from the drop in Prologis' long position.

The idea behind Cromwell Property Group and Prologis pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

Check out your portfolio center.

Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.